Wednesday, 30 November 2016

See Reasons why NCC Halted the Impending hike in Data tariff

The Nigerian Communications Commission on Wednesday announced the immediate suspension of the new minimum pricing template for data services by mobile operators.

The new rate, which would have led to price increase in data for some Nigerians, was scheduled to take effect from December 1 2016. NCC said the decision is to allow for further consultation.

The NCC’s decision comes a few hours after the Senate ordered a stop to the planned increase. Nigerian Communications Commission (NCC) suspends directive on data segment price
floor. Following the concerns that visited the directive to introduce price floor for data segment of the telecommunications sector beginning from December 1, 2016, the Nigerian Communications Commission (NCC) has suspended any further action in that direction.

The decision to suspend this directive was taken after due consultation with industry stakeholders and the general complaints by Consumers across the country. The Commission has weighed all of this and consequently asked all operators to maintain the status quo until the conclusion of study to determine retail prices for broadband and data
services in Nigeria.

Recall that the Commission wrote to the Mobile Network Operators (MNOs) on November 1, 2016 on the determination of an interim price floor for data services after the stakeholder’s consultative
meeting of October 19, 2016.

The decision to have a price floor was primarily to promote a level playing field for all operators in the industry, encourage small operators and new entrants. The price floor in 2014 was N3.11k/MB but was removed in 2015. The price floor that was supposed to flag off on December 1, 2016 was N0.90k/MB.
In taking that decision, the smaller operators were exempted from the new price regime, by virtue of their small market share. The decision on the price floor was taken in order to protect the consumers who are at the receiving end and save the smaller operators from predatory services that are likely to suffocate them and push them into extinction.

The price floor is not an increase in price but a regulatory safeguard put in place by the telecommunications regulator to check anti-competitive practices by dominant operators.

This statement clarifies the insinuation in some quarters that the regulator has fixed prices for data services. This is not true because the NCC does not fix prices but provides regulatory guidelines to protect the consumers, deepen investments and safeguard the industry from imminent collapse.

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